Credit Suisse kept $300 million from brokers in closed US unit: lawsuit
(Reuters) - A new lawsuit accuses Credit Suisse Group AG of withholding up to $300 million of pay from U.S.-based brokers who refused or were unable to move to Wells Fargo & Co after their private banking unit was shuttered in 2015.
In a complaint filed on Wednesday, Christopher Laver said Credit Suisse canceled deferred compensation owed to him and other brokers who did not join Wells Fargo under a "recruiting agreement" between the banks, by maintaining a "facade" that they had voluntarily resigned en masse.
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Laver said Credit Suisse knew many brokers would not join Wells Fargo because its client base was different, but entered the recruiting agreement because a sale of the unit would have constituted a "change of control" requiring the payments.
"Credit Suisse should not be able to avoid its obligation to compensate the advisers fully and fairly by claiming they 'resigned' when, in fact, Credit Suisse simply ceased operating this business," the complaint said.
Laver, who lives near San Francisco, joined another Swiss bank, UBS, after leaving Credit Suisse.
He filed his proposed class-action complaint in the U.S. District Court in San Francisco, and sought unspecified damages.
Credit Suisse had no immediate comment on Thursday. Lawyers for Laver did not immediately respond to requests for comment.
Wells Fargo is not a defendant and was not accused of wrongdoing. It also had no immediate comment.
Credit Suisse awarded Wells Fargo the exclusive right to recruit its brokers on Oct. 20, 2015. It told its roughly 275 brokers in 13 U.S. offices that the business was too small to compete absent significant investment or acquisitions.
Wells Fargo is based in San Francisco. Its retail brokerage recently had 14,544 financial advisers and $1.7 trillion of client assets, and its wealth management business recently had $248 billion of client assets.
The case is Laver v Credit Suisse Securities (USA) LLC, U.S. District Court, Northern District of California, No. 18-00828.
(Reporting by Jonathan Stempel in New York and Brenna Hughes Neghaiwi in Zurich; Editing by Susan Thomas)